OSLO, Norway, July 21, 2003 (PRIMEZONE) -- Norsk Hydro (NYSE:NHY):
Consolidated Results (US GAAP) (unaudited)
Second quarter First half Year
2003 2003 2002 2003 2003 2002 2002
Million, except per
NOK EUR(1)) NOK NOK EUR(1)) NOK NOK
share data
Operating
revenues 40,578 4,915 44,454 85,392 10,343 82,220 167,040
Operating
income 4,619 559 5,077 11,391 1,380 9,900 19,841
Non-consolidated
investees 392 47 (203) 669 81 (95) 33
Interest income
and other
financial income 379 46 288 803 97 874 1,418
Other income,
net (1,881) (227) 142 (1,841) (223) 219 219
Earnings before
interest
expense and taxes
(EBIT) 3,509 425 5,304 11,022 1,335 10,898 21,511
Interest expense
and
foreign exchange
gain/(loss) (227) (27) 1,754 (1,286) (156) 922 517
Income before taxes
and minority
interest 3,282 398 7,058 9,736 1,179 11,820 22,028
Income tax
expense (988) (121) (4,214) (5,262) (637) (6,848) (13,278)
Minority interest 30 4 (4) 51 6 - 15
Income before
cumulative
effect of change
in accounting
principle 2,324 281 2,840 4,525 548 4,972 8,765
Cumulative effect
of
change in accounting
principle - - - 281 34 - -
Net income 2,324 281 2,840 4,806 582 4,972 8,765
Earnings per share
before change in
accounting principle
(in NOK and Euro) 9.00 1.10 11.00 17.50 2.10 19.30 34.00
Earnings per share
(in NOK and Euro) 9.00 1.10 11.00 18.60 2.30 19.30 34.00
Financial data
EBITDA(2)) - million 9,277 1,124 9,125 20,441 2,476 17,713 35,658
Investments -
million 4,223 512 9,652 9,033 1,094 36,055 45,716
Net
interest-bearing
debt/equity (3)) 0.32 0.32 0.48 0.32 0.32 0.48 0.44
(1) Presentation in Euro is a convenience translation based on the exchange rate at June 30, 2003, which was 8.2559. 2) Earnings before Interest, Tax, Depreciation and Amortization. See page 20. 3) Net interest-bearing debt divided by shareholders' equity plus minority interest.
Norsk Hydro's net income in the second quarter 2003 was NOK 2,324 million (NOK 9.00 per share) compared with NOK 2,840 million (NOK 11.00 per share) for the same period in the previous year. Operating income in the second quarter was NOK 4,619 million, a decline of 9 percent compared with 2002. Income before cumulative effect of change in accounting principal for the first half of the year was NOK 4,525 million (NOK 17.50 per share), compared with NOK 4,972 million (NOK 19.30 per share) in the corresponding period of the previous year. Earnings for the second quarter and first half of 2002 included unrealized currency gains of NOK 2.5 billion and NOK 2.4 billion, respectively, resulting from the effect of a significant weakening of the US dollar against the Norwegian kroner and Euro on the Company's US net dollar debt position.
The US dollar is the primary currency impacting all three business areas. The decline against the Norwegian kroner, compared with the corresponding period of last year, has impacted the results for the quarter.
"The quarterly results confirm that the positive operational trend continues in all of Hydro's core areas. Oil and gas production and significant expansion projects are proceeding according to schedule. Within Aluminium it is encouraging to note that total costs in connection with our extensive improvement programs are lower than previously estimated and are proceeding according to plan. The aluminum market continues to be demanding and we do not expect any help from the market for the remainder of this year. Profitability continues to be given greater priority than growth," says President and CEO Eivind Reiten.
"The preparations to establish Agri as an independent listed company are well underway and we are aiming to introduce Agri on the Oslo Stock Exchange in the course of the first half of 2004. The Hydro group will thereafter concentrate entirely on developing Oil and Energy and Aluminium," he adds.
In the quarter Hydro achieved an average oil and gas production of 484,000 barrels of oil equivalent per day (boed), a level similar to that of the second quarter last year. Oil prices have been high, averaging USD 25.5 per barrel, though lower than in the second quarter of last year when measured in Norwegian kroner. Exploration activity has been lower than in the previous year. Hydro is still favorably positioned to reach an average oil and gas production of 510,000 boed for the year.
The improvement programs being carried out in Hydro's aluminium business are developing in a positive manner, while estimated expenses linked to these measures have been adjusted downwards by NOK 170 million. Market conditions remain demanding, especially for the extrusion and automotive area. The business area has made significant investments in order to further improve its relative cost position in primary production, including projects at Sunndal in Norway and Alouette in Canada, and has recently signed a long-term alumina agreement with Comalco.
Hydro Agri is delivering good results in a market characterized by buoyant prices for nitrogen fertilizer. However, high energy costs and a weaker US dollar against the Nowegian kroner and Euro countered the effect of the positive price trend. Agri further strengthened its market positions in Europe and Latin America, and is well equipped to meet the new fertilizer season in Europe.
Norsk Hydro's Board of Directors decided in June to begin preparations for establishing Hydro Agri as an independent listed company with its headquarters in Oslo, Norway. The process of combining the operations that currently comprise the Hydro Agri business area into a separate, new company structure has been initiated. Because of its market positions, production plants, as well as commercial and technical expertise in the industry, the new company will assume a leading position within the global fertilizer industry. Different options regarding the spin-off and listing of the new company are being considered. The preparations for stock exchange introduction are being given a high priority, and the process is expected to be completed in the course of the first half of 2004.
The provision for current and deferred taxes for the first half-year of NOK 5,262 million, represents approximately 54 percent of income before tax. The tax provision has been influenced by amendments to the Norwegian tax regulations relating to the future costs of removing oil and gas installations from the Norwegian continental shelf after production has ceased. Because of this amendment, other income includes a non-cash negative non-recurring effect of NOK 2,207 million, while the tax provision includes a positive non-recurring effect of NOK 2,380 million. Excluding these effects, the tax provision represents 64 percent of net income before tax for the first half of 2003 and 61 percent for the second quarter.
Investments in the second quarter 2003 totaled NOK 4,223 million. Slightly more than half of the investments relate to the oil and gas business area.
Cash flow from operations in the first half of 2003 was NOK 12.4 billion (NOK 9.8 billion). The increase compared to the previous year was mainly due to higher earnings from oil and gas operations and from the aluminium business area.
Second quarter 2003
Non-cons.
Operating inv., Other Depreciation
NOK million income Interest & income and EBITDA
(loss) selected amortization
fin.items
Hydro Oil and
Energy 3,652 6 326 2,290 6,274
Hydro Aluminium 564 231 - 824 1,619
Hydro Agri 622 186 - 265 1,073
Other Activities (101) 214 - 177 290
Corporate and
Eliminations (118) 134 (2,207) 2,212 21
Total 4,619 771 (1,881) 5,768 9,277
First half 2003
Non-cons.
inv.,
Operating Interest & Depreciation
income selected Other and
NOK million (loss) fin.items income amortization EBITDA
Hydro Oil and
Energy 9,827 114 326 4,675 14,942
Hydro Aluminium 1,217 359 - 1,615 3,191
Hydro Agri 1,429 319 - 527 2,275
Other Activities (106) 245 23 388 550
Corporate and
Eliminations (976) 435 (2,190) 2,214 (517)
Total 11,391 1,472 (1,841) 9,419 20,441
Further information about Norsk Hydro ASA and the company's second quarter 2003 results are available on the Internet : www.hydro.com
Certain statements in this press release are or may constitute "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not in the nature of historical facts may be deemed to be forward-looking statements and may contain identifying words such as "believes", "anticipates", "plans", "expects" and similar expressions. These forward looking statements are based on Hydro's current expectations, assumptions, estimates a nd projection about the company and the industries in which it engages in business. All forward-looking statements involve risks and uncertainties. For a detailed description of factors that could cause Hydro's actual results to differ materially from those expressed in or implied by such statements, please refer to its annual report on Form 20-F for the year-ended December 31, 2002 and subsequent filings on Form 6-K with the U.S. Securities and Exchange Commission. With respect to each non-GAAP financial measure Hydro uses in connection with its financial reporting and other public communications, Hydro provides a presentation of what Hydro believes to be the most directly comparable GAAP financial measure and a reconciliation between the non-GAAP and GAAP measures. This information can be found in Hydro's earnings press releases, quarterly reports and other written communications, all of which have been posted to Hydro's website (www.hydro.com).
Norsk Hydro ASA Bygdoey alle 2 N-0240 Oslo Norway Telephone: (+47) 22 53 81 00 Fax: (+47) 22 53 27 25 www.hydro.com
Contact Peik Norenberg Telephone (+47) 22 53 34 40 Cellular (+47) 91 76 15 56 E-mail Peik.Norenberg@hydro.com Contact Tor Steinum Telephone (+47) 22 53 27 31 Cellular (+47) 95 08 39 33 E-mail Tor.Steinum@hydro.com Contact Cecilie Ditlev-Simonsen Telephone (+47) 22 53 20 97 Cellular (+47) 41 55 92 50 E-mail Cecilie.Ditlev-Simonsen@hydro.com